On Tax Day, Taxpayers Pick up $8 Billion Tab
for Walmart and the Walton Family

Report Provides State-by-State Estimates of Revenue Losses

WASHINGTON — Walmart and the Waltons—America’s largest employer and richest family—received tax breaks and subsidies worth an estimated $7.8 billion in 2013, according to a report released today by Americans for Tax Fairness. Released for Tax Day, when millions of American taxpayers and small businesses pay their fair share to support critical public services and the economy, the report shows Walmart and the Waltons have their own set of rules to game the system and get taxpayers to pick up the tab.

Walmart, which was number one on the Fortune 500 in 2013, had $16 billion in profits last year on revenues of $473 billion. The Walton family, which own more than 50 percent of Walmart shares, reaps billions in annual dividends from the company. The six Walmart heirs have a net worth of $148.8 billion—more wealth than 49 million American families combined.

The report shows that $7.8 billion is enough to hire 105,000 new public school teachers if Walmart paid its fair share of taxes and didn’t call on taxpayers to subsidize its low wages.
The report identifies the annual subsidies and tax breaks to Walmart and the Waltons, which include the following:

· Walmart receives an estimated $6.2 billion annually in mostly federal taxpayer subsidies. Walmart pays its employees so little that many of them rely on food stamps, Medicaid and other taxpayer-funded programs.

· Walmart avoids an estimated $1 billion in federal taxes each year. It uses tax breaks, including a strategy known as accelerated depreciation that allows it to write off capital investments considerably faster than the assets actually wear out.

· The Waltons avoided an estimated $607 million in federal taxes on their Walmart dividends which are taxed at a much lower rate than income from salaries and wages.

The report also includes state-by-state data on the cost of the tax breaks used by Walmart and the Walton family. In addition, it estimates Walmart revenue generated from sales of groceries to SNAP (food stamp) recipients in each state.

“This report shows that Americans pay a lot more than they think at Walmart,” said Frank Clemente, Executive Director at Americans for Tax Fairness. “The real cost of shopping at Walmart is much higher than what shows up on your cash register slip. Walmart’s exploitation of large taxpayer subsidies and tax loopholes means higher taxes for everyone else and less money to invest in schools and communities.”

“The most troubling findings in this report are how much Walmart rakes in selling its groceries to food stamps beneficiaries, while it fleeces taxpayers who are subsidizing the low wages and poor benefits Walmart pays its employees,” said Clemente. The report found that Walmart had 18 percent of food stamps sales last year, which were worth $13.5 billion, while its employees received $6.2 billion in taxpayer assistance from food stamps, Medicaid and other income- support programs.

“Major companies and leaders like Walmart and the Waltons are taking advantage of the tax system and leaving taxpayers to foot the bill,” said Clemente. “It’s time they paid their fair share like the rest of us do.”

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

Is the flat tax worth considering? Probably not, because it’s based on the assumption that the complexity of the tax code is significantly reduced by going to a single rate. The real compleities in the tax code have nothing to do with multiple tax brackets. The idea behind an income tax is to have a tax that to some extent reflects ability to pay. The flat tax is based on the simplistic notion that the relationship between income and ability to pay is linear, or that, for some reason, any tax that is not linear funciton of income, is unfair. It’s possible to have a simple tax code that is not flat just as easily as to have one that is.

I think the point is corporations receive many more subsidies than the poor from our government, it is just that they are better at hiding the fact that it is a subsidy.

How sad that the biggest corporation in the US survives and dominates only because it can hire its workers at a discount because taxpayers subsidize their wages. I thought the whole point of capitalism was to compete in the market place. Capitalism as Walmart practices it is as flawed as the communist system you are trashing.

Accelerated depreciation only allows a company to defer taxes, not avoid them, just as a regular 401k contribution allows an individual to defer taxes into the future. If Walmart is still using the assets after fully depreciating on an accelerated schedule, then the tax shield will have been consumed and they will begin paying a higher rate all things equal. I have trouble believing any outfit that misrepresents simple GAAP principles for its own agenda. And I support thexpertisin – these are not Walmart/Walton specific breaks, and should not be held against them. Many of these codes received bipartisan support to spur hiring and economic growth. If you have an issue, take it up with the writers of the code.

Your argument is completely ad hominem, and therefore empty. If you want to discuss the virtues or drawbacks of progressive taxation or taxation of inheritance, present a logical argument backed by empirical data. It’s a mistake to reject a policy outright just because you disapprove of the author (Marx in this case, but it could be Adam Smith or any other philosopher in another circumstance). After all, even a broken clock is right twice a day. BTW, I was well trained as a scientist, not a Marxist.

I think the purpose of the stepped progressive income tax was to quell uprisings for a real Marxist government at a time when IWW members would flood towns (and towns would respond with massacres, e.g. Ludlow, Centralia, Everett). The greater national purpose of a high progressive tax is to prevent overthrow of democratic process through vote buying and to “nudge” capitalists more towards productive investment (railroads, factories, cars, planes, tighty whiteys and tube socks) and away from financialized investment as unproductive investment. At the time it was considered harmful to inherit great wealth, seen as a way to create useless idlers. Those were the days, I guess.

Corporate tax rate should be a function of C-level salaries and all US multinationals should be levied especially for ‘Defense’ (read State Dept, Pentagon, intelligence) in relation to total assets held abroad.

All Pro Empire Americans should feel free to get in on the looting by enlisting.
~~~
“How sad that the biggest corporation in the US survives and dominates only because it can hire its workers at a discount because taxpayers subsidize their wages.”

Quite. Though, you may want to examine the advantage they derive from their Supply Chain, and our Trade Policies, as well..

But, at the EOD, remember, Boycotts work. Revenue, ultimately, comes from the Customer.

If Walmart had lobbied for food stamps, accelerated depreciation (a deferral of tax), Medicaid etc. then I would be upset. But it appears they are just complying with the tax code (as abominably written) and availing their employees of government programs (witness all the folks encouraging people to sign up under Obamacare). We should go after folks disobeying the laws, not those trying to comply with them…and if we don’t like the effect of the laws…we should change the laws. It seems silly to say “hey I passed this program and now you are using it”.

Say Hello

About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

Quote of the Day

"We don’t see things as they are, we see them as we are." -Anais Nin

Sign Up For My Newsletter

Get subscriber only insights and news delivered by Barry every two weeks.